Obama’s SCOTUS win throws another cloud over coal

EPA has had great judicial success with other power plant regulations. | AP Photo

But it’s not yet clear what kind of impact the cross-state rule will have on utilities in the 28 “upwind” states the EPA determined are polluting their neighbors.

Among the unknowns are when the EPA will start implementing the rule, which it issued in 2011 as a replacement for a Bush-era regulation that the courts rejected. The deadlines written into the rule have long passed.

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Meanwhile, other EPA pollution rules that are soon going into effect could curtail the same pollution that the cross-state rule is aimed at cutting, making its effects redundant. In addition, many of the country’s oldest and dirtiest coal-fired power plants are already closing because of competition from natural gas, a trend that could give some states an edge in complying with the rule.

The rule’s critics had objected to the agency’s method of dividing up the emissions cuts among the polluting states. But the EPA won the case by following the “plain text” of the Clean Air Act when crafting the rule, according to Justice Ruth Bader Ginsburg, who wrote the court’s opinion. The court’s job is to apply the text of the statute, “not to improve upon it,” she wrote.

The cross-state rule and the EPA’s upcoming greenhouse gas rule are not directly related, legally speaking. But Roberts and Kennedy joining the majority in the cross-state rule indicate potential critical swing votes that the EPA would need to land a favorable majority in any challenge to the climate rule.

The Supreme Court said it found the EPA’s approach to cutting the state-crossing pollution “sensible,” even if there was a chance it required some states to “over-control” their pollution relative to how much they contribute to downwind states’ air quality problems. That’s a “critical win” for the EPA, said Christi Tezak, managing director at ClearView Energy Partners.

When it comes to the agency’s upcoming climate rule for power plants, the win “could encourage the agency to push for a stronger rule rather than a weaker one,” Tezak said.

Not everyone is convinced that Tuesday’s decision necessarily bodes well for the EPA’s ability to see its climate rules withstand future court challenges.

Scott Segal, director of a power industry group called the Electric Reliability Coordinating Council, said the EPA will have trouble when its climate rules come before the judiciary.

“They’re going to have difficulty defending those rules, but not because of what the court ruled in [the cross-state rule],” he said. “They’ll have difficulty based on many other grounds.”

The bigger issue, he said, is that the EPA’s recent wins may embolden the administration to write stronger rules.

“If those power plants essentially become stranded investments, whereby even the compliance costs associated with [the mercury rule] is insufficient to have those power plants survive once the carbon performance standards are adopted, we’re going to have a significant threat to electric reliability and affordability of electricity,” Segal said.

Others argue that the EPA’s other pollution rules could help states meet the cross-state rule’s emission requirements without too much trouble, especially as older and dirtier coal-fired power plants continue to shut down.

The EPA’s rule had scheduled two phases, the second more stringent than the first. An analysis by ClearView showed that with the exception of Texas, all the states would have been able to comply with the rule in Phase I.

Some environmentalists charge that evidence exists that some utilities are holding back and not running already installed pollution controls while they aren’t mandated. That could mean that utilities have already spent a lot of the capital costs needed to cut their emissions of sulfur dioxide and nitrogen oxides, two chemicals that can create acid rain and respiratory problems.

One analysis shows a slew of plants with major pollution increases between 2009 and 2013. “It seems very unlikely that if [the cross-state rule] were in effect that you would have seen those dramatic increases from so many of those plants, … especially since so many of those plants have modern pollution controls,” McCahan said.

Some parties on the losing end of the case are still considering their options.

A spokeswoman for Texas Attorney General Greg Abbott, whose office led other states in challenging the cross-state rule, said the state is “disappointed” by the ruling but that “we are pleased that the U.S. Supreme Court recognized that EPA’s power to implement this misguided rule is limited. We look forward to pursuing the remaining challenges Texas has raised against this rule now that it has been sent back down to the D.C. Circuit Court of Appeals.”